World Market of Sugar and Sweeteners - Uni Hohenheim

[Pages:60]World Market of

Sugar and Sweeteners

International Association for

Stevia Research e.V. Hirschstra?e 12

D- 70771 Leinfelden-Echterdingen

The study refers mainly to the previous works from Landell Mills "Sweetener Analysis", Rabo Banks "Sugar and Sweeteners" and Giracts "High intensity sweeteners update - Europe 1980-1992-2000". New developments and trends which have been published recently are incorporated, which are published frequently by F.O. Licht, Sugar and Sweetener Outlook (USDA), other sources and own surveys.

All informations given here have been compiled by the authors with their best knowledge. The presentations and interpretations are based on a twenty year long experience and research on the described items.

No responsibility is assumed by the publishers and authors for any injury and/or damage to persons or property as a matter of product liability, negligence or otherwise, or from any use or operation of any methods, products, instruction or ideas contained in the material herein.

All rights reserved. No part of this publication my be reproduced - this is also valid for the individually published parts in so far as they have been used or revised for this compilation and adapted to the overall concept -, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise unless the written permission of the International Association for Stevia Research e.V.

First isssue: 1995 Second issue: 1997 Third issue: 1998 Fourth issue: 2004 Status of the publication: April 17, 2004

The authors: Dipl.-Ing. Dieter Bahndorf, Dr. Udo Kienle

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Table of Contents

1. 1.1 1.2 1.3 2. 2.1 2.1.1 2.1.2 2.1.3 2.1.4 2.2 3. 3.1 3.2 3.3 4. 4.1 4.2 4.3 4.4 4.5 4.6

5. 5.1 5.2 5.3 5.4 5.5 5.5.1 5.5.2 5.5.3 5.5.4 6. 6.1 6.2 6.3 7. 8. 9.

World Sugar and Sweetener Market Definition of Sugar and Sweeteners World Production EU Sugar and Sweetener Market World Sugar Market Factors of Sugar Consumption Income Elasticity of Demand Population Growth The price of Sugar and Sugar Substitutes Cultural Habits and Domestic Availability Sugar Consumption by Region Starch Sweeteners and Polyols History of Starch sweeteners and Polyols Factors Affecting the Use of Starch Sweeteners Consumption of Starch Sweeteners and Polyols Market for Intense Sweeteners Legal Status of Intense Sweeteners Characteristics of Intense Sweeteners Factors Affecting the Use of Intense Sweeteners Development of Intense Sweetener Demand Price of Intense Sweeteners World Wide Competition of the Production of Intense Sweeteners Consumption of Intense Sweeteners Aspartame Saccharin Cyclamate Other Intense Sweeteners Regional Consumption of Intense Sweeteners Intense Sweetener Consumption in Europe Intense Sweetener Consumption in the USA Intense Sweetener Consumption in Asia Intense Sweetener Consumption in Africa and Oceania Market for Intense Sweeteners in Food and Beverages Beverages Sugar Free Chewing Gum Consumer Profile of Intense Sweeteners in EU Natural Intense Sweetener Market Outlook for the Future References

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page 4 4 6 7 8 9 9 10 10 12 14 16 20 21 23 25 28 29 30 31 34 35

37 37 40 41 42 45 47 48 50 52 53 53 54 54 56 58 60

1. World Sugar and Sweetener Market

There is no other food known such as sugar which is dividing so deeply the public opinion. For some, sugar is nothing else as a vitamin robbing molecule and responsible for obesity. Others are judging sugar as an important renewable source used as a sweetener, for aroma enhencing purposes and improving taste in many foods.

The production of sugars is common in the plant kingdom. Glucose as the most common form of sugars is used for energy storing in plants and animals need glucose as a energy source. It is estimated that the plant kingdom produces about 150 billion tons of sugars every year. However less than 1% is only used for human consumption.

This study shows the status and development of the the sugar and sweetener markets in the world and its regions with a special focus on EU. Two industry branches where intense sweeteners are generally applied are demonstrated. Consumer profiles in Europe in the use of intense sweeteners are discussed.

1.1. Definition of Sugar and Sweeteners

Sugar can be defined in various ways. Chemically a lot of sugar forms are known. Sugar in the meaning of poeples language often calls sugar all what is tasting sweet despite of its chemical characteristic. Legally the sweet substances are defined very clearly. For example sugar can only be named what is chemically characterised as sucrose. For this study the used definitions are following the legal approach.

Sugar Sugar is a sweet, crystalline food supplement extracted from sugar beet and sugar cane. In addition to cane sugar and beet sugar other types of sugar are produced on a small scale including maple sugar in the northern hemisphere, corn sugar in Central America, millet sugar in dry regions and palm sugar in tropical countries. Cane and beet sugar however remain the principal sugar products traded on the world market. Sugar (sucrose) consists of glucose and fructose [-D(+)-glucose and -D(-)-fructose] with the chemical formula C12H22O11.

Other forms of sugars Another important source of sweeteness is the sugar of milk or milk sugar, chemically called "Lactose". It is a crystalline sugar present in milk, and separable from the whey by evaporation and crystallization. It has a slightly sweet taste, is dextrorotary, and is much less soluble in water than either cane sugar or glucose. Lactose comprising one glucose molecule linked to a galactose molecule. "Cow's milk contains about 4.7% lactose". The use is limited as many people experience symptoms of gas, bloating, and diarrhea after eating dairy products which could be due to lactose intolerance. A recently approved food ingredient called "Tagatose" is a new bulk sweetener on the basis of lactose. Tagatose is produced by a fermentation process using lactose as substrate.

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Starch Sweeteners and Polyols Starch sweeteners and polyols are sweeteners which provide bulk but with normally lower sweetness than sugar and perform other technological functions in the final food. Fructose, Inulin and the polyols produce a lower insulin demand than an equivalent amount of sucrose and are therfore used in some diabetic foods. Polyols or sugar alcohols are not fermented by oral bacteria to the same extent as sucrose and are therfore used to produce food and drinks with a reduced cariogenicity. Intense Sweeteners Intense sweeteners have a sweetness many times that of sucrose which have no other technological function in the final product. They are essentially non-caloric and are used widely in the manufacture of diet food. Intense sweeteners do not produce an insulin demand when metabolised and are therfore also suitable for use in diabetic foods. Main Differences between Sugar and Intense Sweeteners Sweeteners are by no means simply replicas of sugar. They fail to reproduce the wide range of the functional properties of sugar which are used by food manufacturers to manipulate colour, aroma, texture and shelf-life of their products; this restricts their use in many products. Some sweeteners affect taste adversely, while others are unstable when stored or cooked; some have failed clearance for human consumption. However, sweeteners can have some cost and functional advantages over sugar. Competition among the various sugar and nonsugar sweeteners is fiercest in soft drinks manufacture, in countries where its use and production is permitted and in countries with artificially high sugar prices.

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1.2. World Production

The world production of sugar and sweeteners was in 2002/2003 165,7 million tons sugar equivalents. 82 % is covered by sugar (142,6 Million tons), 11,5 % by starch sweeteners and sugar alcohols (17,6 Million tons) and 7 % by intense sweeteners 11,6 Million tons). Figure 1 shows the actual production.

World Produktion Volume of Sweeteners (2003) expressed in sugar equivalents

Starch Sweeteners and Sugar Alcohols 17,6 Million Tons

10%

Intense Sweeteners 11,6 Million Tons

7%

Sugar 142,6 Million Tons

83%

Figure 1: Volume of sweetener production (2002/2003); Source: Landell Mills, Zuckerindustrie

The total sugar and sweetener market represents a production volume of 49,6 billion US-$. Sugar is accounting for 75,2 % of production, starch sugars and sugar alcohols for 22,0 % and intense sweeteners only for 2,8 %.

Marke t Value of World Swe e te ne r Production (2002) e xpre sse d in Billion US-$

Starch S we e t e ne r s a nd S uga r Alc ohols 10,9 Billion US - $

Int e nse S we e t e ne rs 1,4 Billion US - $

S uga r 37,3 Billion US -$

Figure 2: Production volume of sugar and sweeteners in billion US-$ (2003/2003); Source:Zuckerindustrie

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1.3. European Union Sugar and Sweetener Market

The total volume of the sugar and sweetener market in EU is about 19.5 million tons (intense sweetener is calculated in sugar equivalents, s.e.). The European Union is the second largest consumer in the world of sugar after India and accounts for 10,4% of world consumption. Total consumption of sugar has increased, rising from 10 million tons in 1982 to 14.6 million tons in 2002/2003. Per capita consumption was reduced from 38,14 kg in 1982 to 34,5 kg in 2002.

Volume of S weetener Consumption in EU (2002) expressed as sugar equivalents

Starch Sweeteners and Sug ar Alco ho ls

(1 5 %) 3 M illio n To ns

Intens e S we e t e ne rs (1 0 %) 1 ,9 M illio n To ns

Sug ar (7 5 %) 1 4 ,6 M illio n To ns

Figure 3: Sweetener market in Europe by volume (weight or sugar equivalents); Sources: Rabo Bank, Zuckerindustrie

Value for EU S weetener Market (2002) expressed as Billion Euro

Star ch Sweetener s and Sugar Alcohols 1 ,9 Billion Eur o

Intens e Sweetener s 300 Mio. Eur o

Sugar 9,2 Billion Eur o

Figure 4: EU consumption of sugar and sweetener; Sources: Landell Mills, Rabo Bank, Zuckerindustrie

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2. World Sugar Market

Global sugar consumption currently stands actually at 136,6 million tonnes (2002/2003). 70% of the production is consumed in the countries of production (see also figure 5). Consumption is expected to increase in the future at a rate of 1.2 % annually, to reach 150 million tonnes in the year 2010; this contrasts with growth in the last 20 years of 2% a year. Consumption growth is largely the result of population growth, reflecting the stability of human diets and sugar's role as a basic food product.

Destinations for World S ugar Production

80,0% 70,0% 60,0% 50,0% 40,0% 30,0% 20,0% 10,0%

0,0%

Dome st ic Ma rke t s

1986 - 1988 1991 - 1993 2002 - 2003

P re fe re nt ia l Ra w S uga r Re fine d S uga r

Ma rke t s

World Ma rke t World Ma rke t

Figure 5: World Market for Sugar; Source: US Department of Agriculture; C.Czarnikow Sugar Ltd.

The largest share of sugar is consumed in domestic markets where production occurs. Only 30% of the total sugar production is contributed to the world trade. The importance of bilateral trade agreements (like US Tariff Rate Quota and Eu imports from ACP) is diminishing and accounts only to 3 Million tons of the whole sugar production. Raw sugar trade is increasing as a lot of countries still are puting up refinieries.

Asia is the world's largest sugar consuming region. This position has been achieved principally through rapid population growth (table 1). Despite this, however, Asia has the lowest capita sugar consumption of any region. Developing countries in general are expected to show slackening per capita sugar consumption growth rates in reaction to higher sugar prices. In developed countries, sugar consumption is not expected to change substantially. The global recession has also contributed to the slow rates of growth in consumption.

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